Capital lenders of money such as banks are perceived to be environmentally sensitive in contemporary times. This sensitivity is evidenced by the advent of new concepts such as green financing in the context of environmental catastrophes which are exacerbated by the climate change crisis. Thus, financial institutions such as banks face a dilemma in deciding whether to prioritise sustainability financing or seek after profit maximisation. To this end, little is known if corporate environmental performance lures support of key stakeholders such as banks. The study renders empirical evidence on this phenomenon by investigating short run and long run dynamics between corporate environmental performance and banks’ loan pricing. Archival data were collected from the FTSE/JSE RII listed companies. A sample of 21 companies generated a short panel data set of six years per cross-section totalling 126 observations. The study adopted first differenced econometric models in statistical panel data analyses namely Panel Vector Error Correction Model (VECM), and subsequently Panel Least Squares (PLS), Wald Test, and Impulse Response Functions (IRF). Findings revealed a statistically significant positive impact, both in the short run and long run, between environmental performance predictors and banks’ loan pricing. While the study makes immense contribution to literature, it renders new assertions in understanding stakeholders’ current environmental practices and initiate a new agenda for future research.
{"title":"Effect of Corporate Environmental Performance on Banks’ Loan Pricing","authors":"Witness Siwela, C. Ngwakwe","doi":"10.32479/ijefi.15865","DOIUrl":"https://doi.org/10.32479/ijefi.15865","url":null,"abstract":"Capital lenders of money such as banks are perceived to be environmentally sensitive in contemporary times. This sensitivity is evidenced by the advent of new concepts such as green financing in the context of environmental catastrophes which are exacerbated by the climate change crisis. Thus, financial institutions such as banks face a dilemma in deciding whether to prioritise sustainability financing or seek after profit maximisation. To this end, little is known if corporate environmental performance lures support of key stakeholders such as banks. The study renders empirical evidence on this phenomenon by investigating short run and long run dynamics between corporate environmental performance and banks’ loan pricing. Archival data were collected from the FTSE/JSE RII listed companies. A sample of 21 companies generated a short panel data set of six years per cross-section totalling 126 observations. The study adopted first differenced econometric models in statistical panel data analyses namely Panel Vector Error Correction Model (VECM), and subsequently Panel Least Squares (PLS), Wald Test, and Impulse Response Functions (IRF). Findings revealed a statistically significant positive impact, both in the short run and long run, between environmental performance predictors and banks’ loan pricing. While the study makes immense contribution to literature, it renders new assertions in understanding stakeholders’ current environmental practices and initiate a new agenda for future research.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140979239","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This research paper explores the dynamic relationship between trade openness, financial development, and economic growth in Lesotho. The study utilizes quarterly time series data spanning from 1970 to 2021, obtained from the Central Bank of Lesotho. This paper makes a significant contribution to the methodological discourse by utilizing a time-varying VAR approach, in addition to the Bayesian VAR estimation approach. The empirical results indicate that there is no cointegration relationship between economic growth, financial development, and trade openness. However, the evidence shows a unidirectional causality from economic growth to trade openness in Lesotho. The Bayesian VAR and time-varying VAR estimations reveal that the variables dynamically react and adjust to shocks among the variables. The study recommends that to stimulate the opening up of the economy to the world, growth-enhancing policies such as the provision of world-class infrastructure facilities, improved healthcare facilities, and a conducive macroeconomic environment should be implemented, considering the insufficient international demand in Lesotho.
本研究论文探讨了莱索托贸易开放、金融发展和经济增长之间的动态关系。研究利用了莱索托中央银行提供的 1970 年至 2021 年的季度时间序列数据。除贝叶斯 VAR 估计方法外，本文还采用了时变 VAR 方法，为研究方法论做出了重要贡献。实证结果表明，经济增长、金融发展和贸易开放之间不存在协整关系。然而，证据显示莱索托的经济增长与贸易开放之间存在单向因果关系。贝叶斯 VAR 和时变 VAR 估计表明，变量之间会对冲击做出动态反应和调整。研究建议，考虑到莱索托的国际需求不足，为刺激经济向世界开放，应实施促进增长的政策，如提供世界一流的基础设施、改善医疗保健设施和有利的宏观经济环境。
{"title":"Trade Openness, Financial Development and Economic Growth in Lesotho: BVAR and Time-varying VAR Analysis","authors":"K. Sanusi, Z. Dickason-Koekemoer","doi":"10.32479/ijefi.15721","DOIUrl":"https://doi.org/10.32479/ijefi.15721","url":null,"abstract":"This research paper explores the dynamic relationship between trade openness, financial development, and economic growth in Lesotho. The study utilizes quarterly time series data spanning from 1970 to 2021, obtained from the Central Bank of Lesotho. This paper makes a significant contribution to the methodological discourse by utilizing a time-varying VAR approach, in addition to the Bayesian VAR estimation approach. The empirical results indicate that there is no cointegration relationship between economic growth, financial development, and trade openness. However, the evidence shows a unidirectional causality from economic growth to trade openness in Lesotho. The Bayesian VAR and time-varying VAR estimations reveal that the variables dynamically react and adjust to shocks among the variables. The study recommends that to stimulate the opening up of the economy to the world, growth-enhancing policies such as the provision of world-class infrastructure facilities, improved healthcare facilities, and a conducive macroeconomic environment should be implemented, considering the insufficient international demand in Lesotho. ","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140979983","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study determined economic growth effects of fiscal policy in South Africa. Particular attention was paid to effects of personal income tax on economic growth for the period 1993Q3 -2022Q4. The influence of personal income tax on economic growth was analysed using non-linear autoregressive distributed lag (NARDL) bounds test for cointegration. Estimated results indicated rise in personal income tax is growth-friendly in the short-run. While, in the long –run growth is affected by both positive and negative shocks in personal income tax. Positive personal income tax changes are detrimental to economic growth in the long run. Increasing personal income tax will compromise the country’s economic growth strategy. Furthermore, positive changes in personal income tax affect economic growth more than negative shocks as confirmed by dynamic multiplier graph. Dynamic multiplier graph further reveal existence of asymmetry. Additionally, Wald test value of -6.2775 validated asymmetric effect of personal income tax on economic growth. It is therefore, recommended that policy makers should focus on considering other sources of tax revenue. The current structure of the tax system is skewed towards personal income tax. Policy makers should keep the current ratio of personal income tax and widen tax base to realise inclusive economic growth.
{"title":"Economic Growth Effects of Fiscal Policy in South Africa: Empirical Evidence from Personal Income Tax","authors":"Lavisa Tala","doi":"10.32479/ijefi.15795","DOIUrl":"https://doi.org/10.32479/ijefi.15795","url":null,"abstract":"This study determined economic growth effects of fiscal policy in South Africa. Particular attention was paid to effects of personal income tax on economic growth for the period 1993Q3 -2022Q4. The influence of personal income tax on economic growth was analysed using non-linear autoregressive distributed lag (NARDL) bounds test for cointegration. Estimated results indicated rise in personal income tax is growth-friendly in the short-run. While, in the long –run growth is affected by both positive and negative shocks in personal income tax. Positive personal income tax changes are detrimental to economic growth in the long run. Increasing personal income tax will compromise the country’s economic growth strategy. Furthermore, positive changes in personal income tax affect economic growth more than negative shocks as confirmed by dynamic multiplier graph. Dynamic multiplier graph further reveal existence of asymmetry. Additionally, Wald test value of -6.2775 validated asymmetric effect of personal income tax on economic growth. It is therefore, recommended that policy makers should focus on considering other sources of tax revenue. The current structure of the tax system is skewed towards personal income tax. Policy makers should keep the current ratio of personal income tax and widen tax base to realise inclusive economic growth.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140978124","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper seeks to reinvestigate the contemporaneous interactions using daily closing prices of US eREIT and S&P 500 indices to calculate their respective rates of return. Daily data are used from October 31, 2008 through October 31, 2023 with 3,856 observations. Data are obtained from (www.wsj.com and (https://finance.yahoo.com/). The time series data distributions of both variables are near-normal in term of their respective mean-to-median ratio with very low standard deviations. The Ordinary Least Squares (OLS) is applied to estimate regressions (1) and (2) for reliable and unbiased results, as it meets the statistical criteria for suitability. The regression results show evidence of weak interactions between them with bidirectional causal flows.
{"title":"Interactions between Equity REITs and S&P 500 Returns","authors":"Matiur Rahman","doi":"10.32479/ijefi.15909","DOIUrl":"https://doi.org/10.32479/ijefi.15909","url":null,"abstract":"This paper seeks to reinvestigate the contemporaneous interactions using daily closing prices of US eREIT and S&P 500 indices to calculate their respective rates of return. Daily data are used from October 31, 2008 through October 31, 2023 with 3,856 observations. Data are obtained from (www.wsj.com and (https://finance.yahoo.com/). The time series data distributions of both variables are near-normal in term of their respective mean-to-median ratio with very low standard deviations. The Ordinary Least Squares (OLS) is applied to estimate regressions (1) and (2) for reliable and unbiased results, as it meets the statistical criteria for suitability. The regression results show evidence of weak interactions between them with bidirectional causal flows.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141128458","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article identifies and analyses the socio-economic determinants of financial inclusion. Using data from the FinScope survey (2016) in Burkina Faso, a sequential logit model was used on a sample of 5012 individuals. The results indicate that level of education, age, access to television, urban location, marital status and time to access a bank branch are the main determinants of the first phase of the financial inclusion process. In the second phase of the process, level of education, age, access to television, urban location, marital status and time spent accessing a bank branch emerged as determinants of access to savings. In the third and final phase of the process, household size, access time to a bank branch and confidence in financial institutions were the only determinants of access to credit. The results also show a difference between the factors influencing financial inclusion for men and women.
{"title":"Socio-Economic Determinants of the Financial Inclusion of Women and Men in Burkina Faso: An Analysis using the Sequential Logit Model","authors":"Dimaviya Eugène Compaore, Boukaré Maiga","doi":"10.32479/ijefi.15823","DOIUrl":"https://doi.org/10.32479/ijefi.15823","url":null,"abstract":"\u0000\u0000\u0000This article identifies and analyses the socio-economic determinants of financial inclusion. Using data from the FinScope survey (2016) in Burkina Faso, a sequential logit model was used on a sample of 5012 individuals. The results indicate that level of education, age, access to television, urban location, marital status and time to access a bank branch are the main determinants of the first phase of the financial inclusion process. In the second phase of the process, level of education, age, access to television, urban location, marital status and time spent accessing a bank branch emerged as determinants of access to savings. In the third and final phase of the process, household size, access time to a bank branch and confidence in financial institutions were the only determinants of access to credit. The results also show a difference between the factors influencing financial inclusion for men and women.\u0000\u0000\u0000","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140978587","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study is devoted to the analysis of the current state and prospects for improving housing finance in Uzbekistan in the period from 2018 to 2023. The purpose of the work is to identify key factors affecting the socio-economic stability of the country through the prism of housing sector development, and to develop practical recommendations for optimizing housing finance mechanisms. An analysis of the dynamics of key indicators of the housing sector in Uzbekistan for 2018-2023 revealed a positive trend in the growth of housing construction by 28.6% (from 12.3 million square meters in 2018 to 15.8 million square meters in 2023), an increase in the share of mortgage lending in the structure of housing finance from 23.4% to 41.7%, as well as an increase in the level of housing provision for the population increased from 15.9 sq.m. per person in 2018 to 17.4 sq.m. in 2023. At the same time, there are still imbalances in the territorial distribution of housing construction volumes and the availability of mortgage loans for various segments of the population. The econometric analysis showed that an increase in housing construction by 1% leads to an increase in GDP by 0.28%, and an increase in the share of mortgage lending by 1 percentage point contributes to a decrease in the unemployment rate by 0.14 percentage points.
{"title":"Enhancing Housing Finance for Socio-Economic Stability in Uzbekistan","authors":"Astanakulov Olim, Mumhammad Eid Balbaa, Berdalieva Mukhabbatkhon, Nilufar Batirova, U. Dadabaev","doi":"10.32479/ijefi.16269","DOIUrl":"https://doi.org/10.32479/ijefi.16269","url":null,"abstract":"This study is devoted to the analysis of the current state and prospects for improving housing finance in Uzbekistan in the period from 2018 to 2023. The purpose of the work is to identify key factors affecting the socio-economic stability of the country through the prism of housing sector development, and to develop practical recommendations for optimizing housing finance mechanisms. An analysis of the dynamics of key indicators of the housing sector in Uzbekistan for 2018-2023 revealed a positive trend in the growth of housing construction by 28.6% (from 12.3 million square meters in 2018 to 15.8 million square meters in 2023), an increase in the share of mortgage lending in the structure of housing finance from 23.4% to 41.7%, as well as an increase in the level of housing provision for the population increased from 15.9 sq.m. per person in 2018 to 17.4 sq.m. in 2023. At the same time, there are still imbalances in the territorial distribution of housing construction volumes and the availability of mortgage loans for various segments of the population. The econometric analysis showed that an increase in housing construction by 1% leads to an increase in GDP by 0.28%, and an increase in the share of mortgage lending by 1 percentage point contributes to a decrease in the unemployment rate by 0.14 percentage points.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140977793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is a general consensus, among marketers, that dealing with competition requires their engagement with customers so as to build strong customer relationships. The purpose of this study is to find factors that influence the demand for various fish species caught and consumed in Malawi. Previous studies treated fish as a homogenous commodity even though there are different species of fish. This study is, therefore, the first to provide a disaggregated analysis of the demand for fish in Malawi employing primary data collected from the households in Blantyre city using a multistage stratified random sampling procedure. Results indicate that all the fish species used in the study, except matemba (Barbus paludinosus), are complementary and normal goods. Policy implications arising from this study are two-fold namely; policymakers need to make sure that people have more income to buy more fish and make sure that the price of fish does not just rise anyhow.
{"title":"Demand for Fish in Urban Malawi: An Almost Ideal Estimation","authors":"F. Banda, A. Edriss, Wilson Wesley Jere, H. Phiri","doi":"10.32479/ijefi.15856","DOIUrl":"https://doi.org/10.32479/ijefi.15856","url":null,"abstract":"There is a general consensus, among marketers, that dealing with competition requires their engagement with customers so as to build strong customer relationships. The purpose of this study is to find factors that influence the demand for various fish species caught and consumed in Malawi. Previous studies treated fish as a homogenous commodity even though there are different species of fish. This study is, therefore, the first to provide a disaggregated analysis of the demand for fish in Malawi employing primary data collected from the households in Blantyre city using a multistage stratified random sampling procedure. Results indicate that all the fish species used in the study, except matemba (Barbus paludinosus), are complementary and normal goods. Policy implications arising from this study are two-fold namely; policymakers need to make sure that people have more income to buy more fish and make sure that the price of fish does not just rise anyhow.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140981400","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Hajar Chetioui, Yassine El Bouchikhi, Mohamed Makhtari, Meriem Sahli, Hind Lebdaoui
In view of the amplified inflation rates and economic stagnation in a number of countries in recent times, financial vulnerability became a key concern in both developed and developing economies. The current study advocates financial literacy is a key to lessen financial vulnerability and promote financial well-being. We propose and test a thorough model investigating the key mechanisms contributing to financial literacy, and how it contributes to individuals’ financial well-being in the context of an emerging market (i.e., Morocco). The mediating effects of indebtedness and financial behavior are also scrutinized. Based on survey data collected from a sample of 848 respondents from Morocco, the conceptual model was assessed using structural equation modeling. Our findings suggest financial literacy as a key to lessen financial vulnerability and promote financial well-being. Policy makers in Morocco and developing countries, where financial vulnerability is more prevalent, may use the current study findings to promote effective education programs to improve citizens’ financial literacy and well-being. Our findings also convey no impact of education on financial literacy, suggesting that education programs in Morocco are still not yet aware of the importance of financial literacy as a key shaping students’ career and financial well-being. Education policy makers are therefore urged to incorporate financial education and literacy as a key component in all education programs. Financial education programs should also take into consideration demographic disparities and therefore design financial education programs based on the target group to better delineate financial literacy in education programs.
{"title":"An Investigation of the Impact of Financial Literacy on Households’ Financial Well-Being: An Emerging Market Study","authors":"Hajar Chetioui, Yassine El Bouchikhi, Mohamed Makhtari, Meriem Sahli, Hind Lebdaoui","doi":"10.32479/ijefi.15840","DOIUrl":"https://doi.org/10.32479/ijefi.15840","url":null,"abstract":"In view of the amplified inflation rates and economic stagnation in a number of countries in recent times, financial vulnerability became a key concern in both developed and developing economies. The current study advocates financial literacy is a key to lessen financial vulnerability and promote financial well-being. We propose and test a thorough model investigating the key mechanisms contributing to financial literacy, and how it contributes to individuals’ financial well-being in the context of an emerging market (i.e., Morocco). The mediating effects of indebtedness and financial behavior are also scrutinized. Based on survey data collected from a sample of 848 respondents from Morocco, the conceptual model was assessed using structural equation modeling. Our findings suggest financial literacy as a key to lessen financial vulnerability and promote financial well-being. Policy makers in Morocco and developing countries, where financial vulnerability is more prevalent, may use the current study findings to promote effective education programs to improve citizens’ financial literacy and well-being. Our findings also convey no impact of education on financial literacy, suggesting that education programs in Morocco are still not yet aware of the importance of financial literacy as a key shaping students’ career and financial well-being. Education policy makers are therefore urged to incorporate financial education and literacy as a key component in all education programs. Financial education programs should also take into consideration demographic disparities and therefore design financial education programs based on the target group to better delineate financial literacy in education programs.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140979599","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The objective of this paper is to investigate the influence of fluctuations in exchange rates on the export performance of Bangladesh. The analysis is based on annual data obtained from reputable sources such as the World Development Indicators (WDI) for the period spanning from 1981 to 2022. Autoregressive Distributive Lag (ARDL) bound testing approach is used to estimate the long-term as well as short-term relationship between the independent variables and dependent variable. The exports serve as the dependent variable, while the real exchange rate, gross capital formation (as a proxy for investment), inflation, and real interest rate are considered as the independent factors. The study's findings suggest that Bangladesh's exports are negatively impacted by exchange rates over the long and short terms. However, it is noteworthy that the magnitude of this negative effect is much greater in the long run as compared to the short run. Other controlled variables such as gross capital formation and real interest rate also have negative impact on exports in Bangladesh at lag one. Finally, this study suggests the implementation of policies that will foster better exchange rate stability as well as the pursuit of a stable and sustainable exchange rate policy.
{"title":"The Effects of Exchange Rate Fluctuation on Bangladeshi Exports: An ARDL Bound Testing Technique","authors":"Md. Monir Khan, Asif Ahmed","doi":"10.32479/ijefi.15735","DOIUrl":"https://doi.org/10.32479/ijefi.15735","url":null,"abstract":"The objective of this paper is to investigate the influence of fluctuations in exchange rates on the export performance of Bangladesh. The analysis is based on annual data obtained from reputable sources such as the World Development Indicators (WDI) for the period spanning from 1981 to 2022. Autoregressive Distributive Lag (ARDL) bound testing approach is used to estimate the long-term as well as short-term relationship between the independent variables and dependent variable. The exports serve as the dependent variable, while the real exchange rate, gross capital formation (as a proxy for investment), inflation, and real interest rate are considered as the independent factors. The study's findings suggest that Bangladesh's exports are negatively impacted by exchange rates over the long and short terms. However, it is noteworthy that the magnitude of this negative effect is much greater in the long run as compared to the short run. Other controlled variables such as gross capital formation and real interest rate also have negative impact on exports in Bangladesh at lag one. Finally, this study suggests the implementation of policies that will foster better exchange rate stability as well as the pursuit of a stable and sustainable exchange rate policy.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140981130","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
David James, C. O. Omodero, Helen Nwobodo, F. Odhigu, K. Adeyemo
This study evaluates the effects of personal income tax and consumption tax on the spending system of consumers in Nigeria. The autoregressive distributed lag (ARDL) model has been employed for the co-integration test. The research additionally employs the Error Correction Model (ECM) to assess the pace at which any divergence from the long run equilibrium can return to normal in the current period. The findings show that Value added tax has an insignificant impact on purchasing power of consumers in both the short and long intervals. However, personal income tax and exchange rate exert substantial positive effect on consumer spending power in the long run but not in the short run. At the 1% level, the ECT coefficient is shown to be significant and unfavourable. This demonstrates a pretty slow convergence rate, with the model pushing itself towards equilibrium by 37% each year. The consequence is that any disequilibrium caused by shocks from the previous year requires 37% adjustment speed to return to long-run equilibrium in the current year. There have been several studies on how consumption tax affects households’ welfare without considering the effects of income tax and ever fluctuating exchange rate alongside these whole scenarios. This study puts all of these issues into consideration and contributes meaningfully to the existing literature that personal income tax is an integral part of the factors that affect households’ spending capacity. The study recommends that proper tax policy to enhance consumers’ spending capacity.
{"title":"Taxation and Consumers’ Spending Patterns in Nigeria: An Autoregressive Distributed Lag and Error Correction Model Approach","authors":"David James, C. O. Omodero, Helen Nwobodo, F. Odhigu, K. Adeyemo","doi":"10.32479/ijefi.16129","DOIUrl":"https://doi.org/10.32479/ijefi.16129","url":null,"abstract":"This study evaluates the effects of personal income tax and consumption tax on the spending system of consumers in Nigeria. The autoregressive distributed lag (ARDL) model has been employed for the co-integration test. The research additionally employs the Error Correction Model (ECM) to assess the pace at which any divergence from the long run equilibrium can return to normal in the current period. The findings show that Value added tax has an insignificant impact on purchasing power of consumers in both the short and long intervals. However, personal income tax and exchange rate exert substantial positive effect on consumer spending power in the long run but not in the short run. At the 1% level, the ECT coefficient is shown to be significant and unfavourable. This demonstrates a pretty slow convergence rate, with the model pushing itself towards equilibrium by 37% each year. The consequence is that any disequilibrium caused by shocks from the previous year requires 37% adjustment speed to return to long-run equilibrium in the current year. There have been several studies on how consumption tax affects households’ welfare without considering the effects of income tax and ever fluctuating exchange rate alongside these whole scenarios. This study puts all of these issues into consideration and contributes meaningfully to the existing literature that personal income tax is an integral part of the factors that affect households’ spending capacity. The study recommends that proper tax policy to enhance consumers’ spending capacity.","PeriodicalId":30329,"journal":{"name":"International Journal of Economics and Financial Issues","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140979399","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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